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Kenya to allow duty-free imports from EU after latest trade agreement

Published

5 months ago

July 2, 2024

After ten years of talks, Kenya and the EU have finally implemented a trade agreement, allowing tax-free goods from the 27-member union to enter its domestic market after 25 years.

The EU-Kenya Economic Partnership Agreement (EPA) went into effect on Monday, according to Kenya’s Cabinet Secretary for Investment, Trade, and Industry, Rebecca Miano. The agreement maintains unimpeded access for Kenyan commodities to the European Union, except weaponry.

“The EU-Kenya EPA is one of the most ambitious agreements negotiated between the European Union and an African country in terms of promoting economic sustainability. It can serve as a template for other African countries, particularly those in Eastern Africa to adapt,” Ms Miano said in a statement.

“The agreement includes trade, economic and development cooperation and a chapter on trade and sustainable development which covers provisions on labour issues, gender equality, forestry and environment and the fight against climate change.”

Kenya’s mostly agricultural products, including fruits, vegetables, cut flowers, tea, and coffee, will continue to be able to enter the EU market duty-and quota-free thanks to the agreement, which is the first trade agreement between the bloc and a developing nation.

The agreement guarantees Kenya’s primarily agricultural products, including vegetables, cut flowers, fruits, tea, and coffee, to continue entering the bloc duty-and quota-free. It is the first trade agreement between the EU bloc and a developing nation.

Conversely, Nairobi has promised to liberalize trade after 25 years by progressively lowering import duties from Europe. This implies that mechanical, mineral, and chemical items coming from Europe would not be subject to duties, and EU investments will also receive incentives.

However, the EPA agreement contains protectionist language that prevents the EU from providing broad subsidies for Kenyan agricultural exports until there is a more in-depth policy discussion with Nairobi. The purpose of this section is to protect Kenya’s agriculture and food security from unfair competition from the European Union.

The EU benefits from trade with Kenya, as it imports Ksh150.08 billion ($1.2 billion) and sells items worth Ksh223.12 billion ($1.7 billion) to Kenya. Following the European Parliament’s approval on February 29, heads of state and government can now finalize the ratification procedure, bringing the EU-Kenya EPA into force.

A total of 366 members of the European Union voted in favour of the agreement, 86 against it, and 56 abstained. The document needed approval from Kenyan MPs in order to be put into effect.

The wording of the EU-East African Community agreement, which was previously signed in October 2014 and is currently blocked for approval by the individual parliaments, is extensively modified in this document. The introduction of provisions addressing climate change is the primary modification.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

1 day ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.

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Dangote refinery begins petroleum sales to West Africa

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

In an indication to traders that the activities of its mega-refinery might soon disrupt regional fuel markets, Nigeria’s private Dangote Petroleum Refinery has started exporting refined petroleum products to neighbouring West African nations.

According to a Bloomberg story on Tuesday, a tanker had transported a consignment of petrol from the Dangote Petroleum Refinery to seas off the coast of Togo, a nearby West African nation. The article cited data from Vortexa, Kpler, Precise Intelligence, a port report, and a ship-tracking tool.

According to the source, a CL Jane Austen recently departed west after loading over 300,000 barrels from Dangote.

Recall that Mustapha Abdul-Hamid, the chairman of the Ghana National Petroleum Authority, stated last month that the nation is thinking of purchasing petroleum products from the Dangote refinery in order to reduce the approximately $400 million it spends each month on more costly exports from Europe.

Speaking at the OTL Africa Downstream Oil Conference in Lagos, the chairman of NPA, Ghana, said that by eliminating freight expenses, buying from Nigeria instead of Europe will lower the cost of other products and services.

“If the refinery reaches 650,000bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices,” Hamid said.

Two weeks ago, it was announced that the refinery would start exporting fuel to Namibia, Angola, and South Africa. Four more African nations—Niger Republic, Chad, Burkina Faso, and Central Africa Republic—had also begun talks with the refinery, it was said.

According to a very reliable source who spoke directly to one of our reporters, the management of the refinery with a capacity of 650,000 barrels per day was in the advanced stages of negotiations with the nations to begin lifting petroleum.

“I can confirm to you that talks are actually at the advanced stage with Ghana, Angola, Namibia, and South Africa, while the initial discussion is coming up with Niger, Chad, Burkina Faso, and the Central African Republic,” the source said.

The petroleum product shipment is currently floating off the coast of Lome, which is a well-liked location for ship-to-ship transfers, according to the source.

Furthermore, the final destination of the cargo of the CL Jane Austen is uncertain.

Despite being off Togo, the region is frequently utilised for ship-to-ship transfers, thus the gasoline may eventually be transported elsewhere.

“While the shipment is tiny in the context of the global gasoline market, it signals the ramp-up of Dangote’s production and the potential to export significant volumes of gasoline beyond Nigeria, which could upend regional markets.”

Last month, the refinery sent its first shipment of petrol by sea to Lagos, a neighbouring commercial centre.

Under the regulatory statute, the Federal Government last month terminated the state-owned oil company’s monopoly on purchasing gasoline from the plant for domestic use, but it has permitted the ongoing importation of fuel from the US and Europe.